Foreclosure Clean-up & REO Trashout Business — How Much Money Can You Really Make in the Industry

Foreclosure Clean-up Business? How Much Money Can You Make Trashing Out and Cleaning Up Foreclosures?

Foreclosure Cleanup and REO Trash Out Business — How Much Money Can You Really Make Today in this Industry?

The work is starting to flow in — in bulk — to foreclosure clean up companies, as evidenced by the MSNBC article entitled, Foreclosures Bring Out Cleanup Crews. The article profiles a property preservation company owner.

If you’ve ever wondered what a work week is like for this type of business owner, the entrepreneur profiled in the piece gives a good glimpse. It states that he . . . inspects roughly 90 structures, secures 20 others, and trashes out between 10 and 20 “REOs” (bank shorthand for “real estate owned”).

Why the Foreclosure Cleanup Business Booming Right Now

Foreclosures: Obviously, this is a big part of the reason foreclosure clean-up and property preservation businesses are booming right now. The United States has been in a home foreclosure crisis since late 2007. And, the crisis continues today.

According to the February 2009 CNN Money article, Obama’s foreclosure fix on the way, “More than a million homes are already in foreclosure, and more than 2 million more are expected to succumb this year.”

Staggering!

And, the longer a house sits, the more problems it presents — on a number of fronts, ie:

Bank Delays: When a home goes into foreclosure, banks have to process the paperwork before any job can be performed or work can be done on a property. In a normal home foreclosure market, this process can take a few weeks or a couple of months at most.

In this market, it can take six, 9 or more months — even beyond a year in the hardest hit states like California and Florida. And, what happens in the meantime?

The house is just sitting, susceptible to mold, vandalism, and other general decay that happens when a property is “abandoned.” Abandoned is in quotation marks because that’s essentially what happens until the mortgage holder/lender (usually a bank) can come in, do an inspection and start to provide ongoing maintenance.

And, this is where foreclosure clean up companies come in. By the time they get to a house — it’s no telling what they may confront — rotting trash, left-behind debris and personal belongings, rodent infestation, mold due to water damage, etc.

And, this is what makes it so lucrative; larger companies have contracts waiting on thousands of homes across the nation.

According to the property preservationist in the article mentioned above, on a typical foreclosure trashout job, he grosses between $250 and $2,000. Remember, he does 10 to 20 of these a week. A quick run of the numbers brings his weekly gross to between $2,500 and $40,000 (yes, $40,000!).